Risk in agriculture as impediment to rural lending: the case of North-Western Kazakhstan

Martin Petrick and C. Markus Ditges

No 24, IAMO Discussion Papers from Leibniz Institute of Agricultural Development in Transition Economies (IAMO)

Abstract: On the basis of portfolio selection theory, this paper finds that whole-farm risk must be regarded as a major reason for the low level of credit flow to agriculture in North-western Kazakhstan. A quadratic programming model was used in order (a) to demonstrate the comparatively high overall risk exposition of a typical farm, (b) to show that an inflow of working capital could contribute to risk reduction, and (c) to illustrate short-term risk management strategies. Although there may be a role for the government in reducing risk exposition of agriculture in its current form, natural and economic constraints suggest to pave the way for structural reforms that reduce the importance of agriculture in the rural economy.

Keywords: Agricultural credit; Kazakhstan; Portfolio selection theory; Risk programming; Agrarkredit; Kasachstan; Portfolio selection-Theorie; Risiko-Programmierung (search for similar items in EconPapers)
JEL-codes: C61 G11 Q14 (search for similar items in EconPapers)
Date: 2000
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: RISK IN AGRICULTURE AS IMPEDIMENT TO RURAL LENDING - THE CASE OF NORTH-WESTERN KAZAKHSTAN (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iamodp:14939

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